The Renault-Nissan alliance, public perception of internal combustion engines and electrifying sports cars … What else happened in the automotive and mobility sectors? Please enjoy our auto industry and mobility briefing for 12th February to 18th February 2018.A PDF version can be found here.
Favourite stories of the past week…?

Good Thing — Porsche wrote a press release in praise of electric sports cars. The company reckons that good designs will wow with their acceleration and dynamics. Porsche’s conversion is significant because it suggests baby steps towards the justification for a pricing methodology for electric vehicles versus diesel and petrol. Thus far, the accepted wisdom has been that electric cars need to reach price parity (ignoring the fact that there is no price parity between petrol and diesel, or different power levels). Charging for extra acceleration probably won’t close the cost gap yet, but why not get something for your efforts?

Investing a further $25 million in its Kentucky plant to increase Navigator and Expedition production, saying that the plant is already working a continuous three shift pattern and over the weekend. (Ford)

Recalling a small number of Escape and MKC vehicles to correct brake problems. (Ford)

Wants to reduce the number of expatriate employees in its Chinese business by 30%. (Ford)

Extended a do not drive warning on vehicles with Takata airbags that have not yet been repaired. (Reuters)

Geely (includes Volvo)

Proton published an open letter making a series of concessions to help Malaysian dealers improve their profits. (Malay Mail Online)

Is closing the Gunsan, South Korea, plant. The company said that in the last three years plant utilisation has been around 20%. Shutting down operations will cost $375 million in employee payouts, with another $475 million of asset write-offs. The company said performance in South Korea needed to improve with a concrete plan by the end of February — suggesting it close other factories if necessary. (GM)

South Korean officials were apparently taken by surprise by GM’s announcement with insiders saying that trust with the company had collapsed. (Reuters)

Hyundai / Kia

Hyundai’s head of autonomous vehicles said that sales will be driven by ride sharing fleets rather than individual customers. (Bloomberg)

Mazda

58% of drivers Mazda surveyed said that they expect more innovation from internal combustion engines trumpeting the results as confirmation that “consumers don’t necessarily share the view of many organisations that the internal combustion engine has no role to play in the future of cars”. (Mazda)

Implication: Mazda is missing the point. By its results, 42% of customers think ICEs are finished — and this is at a time when the sales rate of electric vehicles is in the low single digit percentages. Whether or not the technology is finished — and there is good reason to believe ICEs can offer quite substantial further efficiencies — electric vehicles are going to take increasingly large shares of the market and it’s a big call to have a portfolio that lacks depth in the technology.

CEO Carlos Ghosn said he believes that Renault and Nissan are “well advanced” in understanding how to make money from electric cars and that rising raw material costs are not a threat since battery design is improving. (CNBC)

As expected, the Renault board recommended that CEO Carlos Ghosn have his contract extended until 2022, calling on him to make the Renault-Nissan-Mitsubishi alliance “irreversible”. (Renault)

CEO Ghosn said that European customers are “running out of diesel” and that retail customer demand for gasoline was much higher than the current sales rate. He cited the Dacia Sandero as a vehicle where Renault was seeing a particularly large swing in demand. (Seeking Alpha)

Recalling around 22,000 vehicles in North America to correct problems with the fuel system. (Toyota)

Executives said Toyota is looking at scenarios where individuals have mainly given up their own cars in favour of autonomous services, but those that remain are more like “pure race cars”. (Economic Times of India)

Implication: These comments mirror Ad Punctum’s future state hypothesis: privately owned cars will not be eliminated (although numbers will reduce significantly), but they will have to become more compelling and emotional to justify their purchase — yet still affordable.

Porsche issued a press release championing EVs; the brand drew attention to the acceleration and cornering dynamics that come with good execution. (Porsche)

Implication: Ad Punctum’s belief is that electric cars offer performance that is revenue-worthy in its own right and although this may not be sufficient to close the near-term cost gap to an ICE product, its better to make the most of it than leave it on the table. Porsche’s article indicates that acceleration and handling will make up a big part of the Mission E sales pitch to customers.

There could be strikes at Škoda after unions rejected the company’s offer of a pay rise in line with inflation. (Reuters)

VW said that it is producing powertrain units for electric cars (e-up!, e-Golf and Passat GTE) at a rate of around 200 per day. (VW)

Implication: Although almost negligible in the overall scheme of things, this suggests an annual run-rate of almost 50,000 units per year — enough to move VW into the middle of the EV pack.

Other

Vietnamese company VinFast will develop two new cars (a sedan and an SUV) designed by Pininfarina selected after feedback from an internet contest. VinFast are aiming for annual sales of 100,000 to 200,000 units by 2025, with the first vehicle launching in 2019. (Mahindra)

Ineos Automotive has contracted a team of 200 engineers from MBTech to develop the Grenadier SUV. The company says prototypes will be running in 2018, with production vehicles in 2020. (Autocar)

Dyson are reportedly planning a 10,000 unit run for their first car, with two subsequent vehicles realising higher volumes. (Autocar).

US start-up Hackrod is aiming to raise $1 million for development of a 3D printed sports car. (3D printing industry)

Cummins has acquired the automotive battery business of Johnson Matthey. (Autocar)

Michelin’s 2017 net revenue was €22 billion and operating income was €2.74 billion. (Michelin) The company also said that it was buying a 20% stake in German automotive servicing company ATU. (Michelin).

Mahindra purchased a 16% stake in car sharing firm Zoomcar. The two are already partnering in a scheme to create more electric car sharing. (Mahindra)

Uber is reportedly in talks to sell its ASEAN business to Grab in exchange for a part stake in the company. (CNBC)

Uber’s CEO is “pretty darn confident” that the company could be profitable in the near future, if it chose to reduce spending on growth and innovation. He is hoping Uber will have a “path” to profitability in 2019 when it plants to start talking in detail about an IPO. (Business Insider)

Uber lost $(1.1) billion in Q4 2017 on bookings of $11.06 billion and net revenue of $2.26 billion. (Business Insider)

Uber published a white paper about its vision for work in Europe, arguing that it provided a useful opportunity for freelance work that could help people earn, and championing the gig economy in general. (Uber)

Hyundai’s head of autonomous vehicles said that sales will be driven by ride sharing fleets rather than individual customers. (Bloomberg)

Waymo has received a permit to operate commercial ride-hailing services in the state of Arizona, where it already has a test fleet. (Quartz)

A report by the London Assembly (regional government) said that the city would not be ready for driverless cars before 2030, and urged the adoption of car sharing instead. (Bloomberg)

Mining company Rio Tinto said that it would increase its 80 vehicle autonomous mining truck fleet to 140 units by 2019, citing substantial increases in productivity and cost reductions. (Rio Tinto)

Driverless buses are going into operation at Fukushima, reducing the number of people at the site. (Japan Times)

Implication: This is a high-profile example of a niche use-case area that autonomous vehicles will very soon be commercially capable — shuttle services on closed, or low volume roads. Although these applications will not create demand for millions of vehicles, they will provide valuable learning and demonstration of the value and safety record of AVs.

Mahindra unveiled an electric platform called MESMA that can accommodate a range of battery sizes between 21 kWh and 54 kWh (in extended wheelbase form). Initial production vehicles will be released before 2021. (Autocar)

Faraday Future has reportedly raised a further $1.5 billion, over $500 million of which is in the bank. The company held a special presentation to reassure suppliers and a smaller product, dubbed FF81 is now rumoured to be in development. (Business Insider)

China has changed its subsidy scheme for electric cars. Vehicles with a range of beyond 400km now receive a larger incentive, while the qualifying level for any amount has been raised to a range of 150km. (Bloomberg)

70% of respondents to a Spanish survey believe all cars will soon become electrified. (Facon Auto)

Connectivity

Denso took a stake in cloud-based software development firm Creationline. (Denso)

PayByCar announced an agreement to use toll payment systems from E-ZPass to provide a aftermarket in-vehicle payments system. (Xconomy)

Other

An Australian university is developing a bodywork repair robot that uses 3D printed parts. (3D Printing Industry)